It is important to appreciate the fact that any board plays a significant role when it comes to risk management within an organization. Some of the most common responsibilities of the board have a direct correlation to risk management. One of the jobs of a board that directly affects risk management is increased scrutiny over risk (Morrill, 2011). Research has shown that there has been increased corporate governance involvement in corporate risk through the formation of policies. This has a direct influence in the hierarchical management of risk. The second responsibility of the board is the analysis of potential loss areas regarding finances and revenue allocation. At some point, the board gets to have a direct involvement in the management of risk due to the financial decisions reached when discussing matters to do with losses (Valsamakis, Vivian & Du Toit, 2015). In addition to that, one must appreciate the fact that the board is very instrumental when it comes to the development of policies, procedures, and awareness, there is a higher chance that risk management can come into play.
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The board has some obligations in this case. The first obligation of the board is policy making. This is seen as the most crucial part of an organization as it affects the manner in which various operations are driven. Preservation of financial resources is another obligation of the board, a key to day to day operations and lastly, there is an overall accountability. Obligations for none – profit organizations are mostly inclined towards the purpose of the organization, ownership as well as public support. In this case, obligations are defined but not solely reliant on the organization’s goals. On the other hand, profit organizations have unique obligations such as keeping financial records, driving time plans and executing growth agenda (Morrisey, 2014).
- Morrill, A. (2011). Profit & Non – profit organizations (2nd Ed.). New York: Ferguson.
- Morrisey, M. (2014). Health insurance (2nd Ed.). New York: New York University Press.
- Valsamakis, A., Vivian, R., & Du Toit, G. (2015). Risk management. Sandton: Heinemann.